Thursday, 12 October 2017

MUSKRAT SUBSIDIES WILL CAUSE A GOV'T DEBT SPIRAL

In PlanetNL2, Nalcor’s 50-year Dividends forecast was assessed
along with the assumed costs of the 50-year Muskrat Power Purchase Agreement
(PPA). At the time, a revised Nalcor PPA
cost forecast was not available, therefore some general guesstimates were made
in the absence of specific numbers. The
preliminary analysis predicted huge subsidy requirements from Government to mitigate
Nalcor losses and bankruptcy.

On October 3, 2017 Nalcor responded to a citizen’s Request
For Information to issue the up-to-date forecast of PPA costs. A full analysis is presented here using
Nalcor’s own exact PPA and Dividend numbers, in combination with the Premier’s
expressed 17 c/KWh rate cap, and the PlanetNL prediction that energy sales will
fall by 30%. The results are indeed as frightful
as feared: Government debt is going to rapidly mount and crush program
spending.

.….

The most efficient way to convey this highly technical
analysis is with charts showing the cash flows.
All are based on Nalcor’s 50-year payback period from 2021-2070.

First is Nalcor’s forecast (data released Oct.3, 2017) of the massive
PPA costs to be paid by NL Hydro to the various combined Muskrat entities. These costs are due on a take-or-pay contract
basis regardless of the anticipated drop in energy consumption. These costs will get worse if the project
capital cost increases or if Operations and Maintenance budgets prove to be
higher than is presently included within Nalcor’s predicted costs.

In the next chart, it can be inferred that a large part of
the PPA revenue is clearly intended to be delivered to the Province as
Dividends (data released Aug.31). These
substantial cash flows are supposed to be available to pay back Government its
equity investment and provide the promised future earnings. Export revenues – sales to Nova Scotia or
beyond – are included.

The difference between the PPA and Dividend was essentially
supposed to be paid by Newfoundland isolated island ratepayers through
increases of their billings. Here, the
Nalcor plan is in for a major stumble as ratepayers will balk at extreme
electricity rates.

Premier Ball has even admitted as much when he stated 17
c/KWh was the highest rate consumers might bear – he appears to acknowledge
that anything higher is desperately unaffordable.

What Nalcor and the Premier have yet to acknowledge though is
the certainty that electricity consumers will substantially reduce their
consumption as rates rise. An energy
sales drop of 30% is easily predicted if rates hit 17 c/KWh or higher. A rate cap combined with the energy sales
drop, for all it’s troubles, will prove to not increase total revenue much at
all.

Nalcor’s next major stumble is their never-ending belief
that energy sales are always going to increase.
Newfoundland is facing a long-term
substantial population decline which alone will cause long-term electricity demand
to drop. A declining economy – a key
side effect of non-competitively high electricity rates – is also probable. Global technology development is also
resulting in increasingly energy efficient products such that automatic growth
of household and business energy demand is no longer realistic.

The chart below predicts
Newfoundland (isolated island only) ratepayer sales revenue based on NL Hydro
selling 5000 GWh/yr in 2021. The bulk of
it, 4300 GWh/yr is for the residential and commercial markets sold at 17 c/KWh
as suggested by the Premier. The industrial
market is expected to buy 700 GWh/yr at 7 c/KWh. The model allows rates to increase by 2% annual
inflation (ie. all the revenue growth in this chart is simply due to inflation).

Nearly all the sales revenue is needed to pay Hydro’s
non-Muskrat costs plus Newfoundland Power to maintain the isolated island system
that exists today. The chart below removes
what is expended on the non-Muskrat costs.
The remaining portion shown is the net ratepayer contribution toward Muskrat
PPA costs: a tiny fraction of Nalcor’s PPA needs even at a high electricity
rate of 17 c/kwh.

Premier Ball intends for Government to subsidize Muskrat but
he is yet to acknowledge the extent of such a subsidy. The next chart calculates the requirement.

Government will first
decline to collect and use the Dividends; however, alone this is insufficient: Government will have to inject additional
cash starting with over $500M in 2021.

For those who thought there was an upside to Muskrat some
years down the road, it’s impossible to find it in these numbers.

Compounding
of Government Debt

Government’s $4.0B in Muskrat equity contributions is being carried
as Government debt and bears interest charges every year. Up to and beyond 2021, interest charges will
accumulate and compound as zero Dividends are available to pay off any interest
or debt. Government, already deep into
repetitive budget deficits, is realistically only going to post bigger deficits
and will borrow more money to subsidize Muskrat.

The following chart combines the original $4.0B Muskrat debt,
adds the new capital injections and adds the powerful force of compounded
interest expenses. The borrowing cost used
in the calculations is a conservative 5% which assumes only a mild bond rating
decline which might well be in effect by 2021.
The Muskrat Net Debt is shown both with and without inflation (2%/yr).

The last column at the right indicates the total net present
value of the Muskrat project to Government: a $48B loss. An additional 2% interest hike – quite
possible if the bond raters more aggressively downgrade the Province’s credit
rating – would increase the loss to $108B (50-year financing terms are very rate-sensitive
and this is a huge risk going forward).

Those who feared that the project is adding $12B to the public debt need
to consider this cataclysmic range of numbers instead.

Stark
Reality

While preparing this post in recent days, two new reports
surfaced highlighting the Province’s debt predicament. The Federal Parliamentary Budget Office
released its 2017 Fiscal Sustainability Report and found that Newfoundland is
the most unsustainable province. The
Province also released its Public Accounts Report for the last fiscal year
showing Total Net Debt has jumped to $13.6B: some Muskrat equity debt is
included with more noted to come.
Neither report recognizes the potential long-term subsidy costs of
Muskrat.

The analysis of this post reveals the Province racing towards a fiscal cliff at far greater speed than most authorities are
aware. The numbers calculated to 2070 are irrelevant: a financial collapse is likely imminent before 2030. Immense taxation and embarrassingly poor
Government services may be just a decade away.

How is it the Government does not recognize or acknowledge the
overwhelming evidence of energy demand compression resulting from ballooning rates
in combination with the province’s negative demographic and economic growth
forecasts – all factors certain to make Muskrat energy completely unnecessary
to this province’s needs?

How is it that Government does not recognize the enormous
peril that endless subsidies, needed to operate a grotesquely uneconomic project, threaten to effectively bankrupt the Province in the next decade?

The frightening economic realities of the Muskrat Falls
project, easily laid out here, must not go unanswered. Time is of the essence and cowering behind a
planned Inquiry is no excuse for the Premier and top officials to not address
these critical issues now. Not only will
the Inquiry cost many millions, inaction by Government until after an Inquiry
threatens to carelessly add billions more to the public debt.

Additional
Assumptions and Risks

The financial modelling behind this post relies heavily on
Nalcor’s numbers presented as-is while integrating the Premier’s rate cap. The only serious modification was to reduce
Nalcor’s energy sales forecast. The Nalcor
data carefully excludes rate information: it focuses entirely on costs and
revenues as rates are something that would be determined later using
cost-of-service utility system principles as practiced in this jurisdiction.

The year 2070 drops down in nearly all the charts as it is
not scheduled to be a full year of PPA payments or Dividends. Also, while payments
are actually scheduled to begin in late 2020, even Nalcor doesn’t fully
tabulate for cash flows in that year, therefore 2020 has been uniformly
excluded.

Nalcor Oct.3 data includes a 10-year forecast (2021-2030) of
total Hydro costs that allowed determination of their expected NL Hydro isolated
island costs. This simply requires
removal of Labrador market revenues and the isolated diesel community revenues
which are known to be presently well under $40M total. Beyond 2030, a 2% inflation factor is added
to all non-Muskrat business costs and revenues.
Likewise, Newfoundland Power is conservatively expected to require $240M
beginning in 2021 with 2% annual inflation thereafter.

Many assumptions in the model are conservative and leave
more potential for losses to increase rather than decrease. Among the concerns are:

1.Additional increase to Muskrat capital cost. Apparently Nalcor is already over 80% spent
and has 3 years work left to do on the less than 20% budget remaining which
seems like a very low burn rate for a 3-year period. Perhaps a budget overrun of another billion
or two is imminent and the Inquiry shall provide useful political cover to “discover”
these findings.

2.Any increases to the Muskrat system’s Operations
and Maintenance Budgets will be over and above the PPA costs and would increase
Government subsidy. Major risk issues
lurk throughout the project that could add huge expenses: geotechnical instability,
lack of water management rights, transmission system complexity and various design,
construction and material quality concerns.

3.The energy sales drop may be steeper than the
30% reduction used in this analysis and/or long-term negative growth due to population
or economic decline could be realized beyond 2021. With a rate cap in place, revenue declines
and Government subsidy must increase.
The scenario prepared in this analysis might be cautiously considered
high.

4.Nalcor’s Oct.3 data for the 2021-2030 non-Muskrat
Hydro costs (the total required revenue minus the PPA) appear to be lowballed:
these costs are presented as decreasing over a 10-year period instead of
increasing with at least a nominal inflation factor. If actual costs climb by inflation through the
period, Government subsidy would increase by $90M in 2030.

5.The Premier’s 17 c/KWh rate suggestion is surely
too high for a great many low-income consumers.
Government will be under tremendous pressure to fund a low-income
subsidy program that will further increase Government debt. An amount around $50M/yr could be ballparked
as a form of necessary social assistance through power bill rebates.

6.The sector that will have the hardest time
adapting to high rates and enacting efficiency improvements will be Provincial
Government buildings. Government’s own
power bill increases will add millions in new annual debt or their energy
improvement capital projects will add new debt.

7.The analysis excludes consideration of the Rural
Deficit program which presently collects $60M+ of over-payment from Newfoundland
Power customers that is redistributed to rural markets. When reassessed, rural diesel rate areas,
presently subsidized on average 75%+, may be in for a substantial rate increase. The added revenue may be under $10M and
political opposition may partially neutralize their increase.

These concerns could easily wipe out the net ratepayer
revenue amount available to put toward Muskrat costs or turn it negative. Numerous other issues are available to
critique. The Dividend assumptions may
be over-optimistic, Hydro and Newfoundland Power costs may escalate at greater
than inflation, and more. None of these items
should need much discussion, however, as the business case for Muskrat is so
remarkably dead it’s not worth whipping any further.

Next
Post

This posting was an unscheduled follow-up resulting from
Nalcor’s Oct.3 release of the PPA costs forecast. In the next post, to appear later this month, the
cancellation of the Muskrat project will be presented as the most rational and
economic solution to meet Newfoundland isolated-island energy requirements.

Frustrated by the continuing lack of honest and credible
information from Nalcor and Government, PlanetNL, having a suitable analytical
background, is presenting independent research and calculations. This is a spare time activity outside of
regular professional commitments. All
key information used to develop the views and analysis are publicly
available. The analysis cannot avoid
entering public policy space: if Government or Nalcor wish to refute the
analysis, they are welcome to present an open and honest rebuttal.

79 comments:

Dwight's optimistic 50% increase cap is a bone thrown out to us poor plebes to assuage our anxiety. A 50% hike may seems innocuous to Dwight, but as noted above, is unrealistic and generally not affordable. The inquiry should be not what happened, by whom, and why and how; we all know those questions; but, rather, what can we do, by whom, and why and how to survive the next 50 or 60 years.It is obvious Dwight's feeble attempts so far are non-starters.

Other questions for an inquiry might include:

Are there any lessons to be learned about the last time we went broke and had to be baby sat for a number of years?

Can or should the Government of Canada bail us out? And, what would we owe them for such a bail out?

Maurice your letter is a masterful rebuttal of the false underpinnings upon which MF is based. It also lays to waste the 80% complete myth. I suspect, if the past is any indication, that the remaining 40 to 50% on the dam and commissioning will stretch out.

You also seem to have put a burr under Danny.....er John Smith's saddle judging from his quick ad hominum attack.

The 'evidence' of a downturn in both peak demand and energy consumption and that Smith says doesn't exist, comes from Nalcor itself and shows that peak demand has been down for the last 2 years and for 2016 energy consumption was also down from 2015 and has never, ever reached our peak of 2004 (still almost 4 per cent below what we used in 2004) --- see http://www.vision2041.com/demand.html

Hey Brother Bruno.......it is past time that we brought the morality of Jesus into this Muskrat debate.......John Smith has recently done so twice with his phrase :The truth shall set you free...............and used against Maurice. Now remember Jesus said ALL MEN ARE LIARS, and I guess he meant mankind, that included women. Agreed Maurice had a masterful rebuttal against Pam`s piece. Readers here should read both. Now Smithy says Holyrood has about 725 MW of thermal that is old and needs replacing.......and MF is just the solution. Holyrood main plant is about 490 MW, of which about 25 is needed to feed its own services, so about 465 Net MW The new gas turbine is 123MW peak......and about 12 MW of diesel = 600 MW not 725 at Holyrood Hardwoods has 50 MW of gas turbine, near St Johns, and Stephenville has 50 on the west coast. In all.........725MW.......but not all at Holyrood. Of this, in winter now we operate Holyrood at about 350MW average, and of the total generation for the grid, only about 13 percent, way down from 30 percent about a decade ago. So you can see where 300 MW or so from the Upper Churchill can pretty well handle our load.......so why waste another 5 billion on the MF generation plant. Now as Liberty says, MF power lacks reliability to allow decommissioning our thermal power. We need thermal power as backup, mostly at Holyrood. Smithy evades such truth. No one has a monopoly on TRUTH, neither I, You , Maurice, Pam or John Smith........ but..... We are each entitled to our own opinion , but not our own facts. Smith play foot loose with facts and truth, more than anyone. Perhaps he is a Russian agent, or a Hydro Quebec agent (kidding)..... There are some 20 John Smiths in the local phone book......can we discover his true identity....... The truth will set you free......who am I to dispute the wisdom of Jesus. John Smiths identity needs to be set free, and maybe Smithy hove in jail, for intentional deception of the public.......or, eventually, in the permanent jail , Jesus talked about......Hell,........where his soul will be forever tortured. That may be justice for John. It would be good if we can find out some truth about John Smith.......he has led so many astray, with clever manipulation of data, in defence of Muskrat. PF

And Brother Bruno, you may know, the Gospel John 8;32 says ` when you know the truth , the truth will set you free. The question is does Smithy know the truth,and distort it intentionally... it appears so. Can the Telegram fact check and state if Maurice or Smithy more acturately tell the truth.............and can we trust Ashley, or anyone at the Telegram to do that investigative fact checking....... Meanwhile this piece by PlanetNL is a great piece of analysis, requiring a response by the government and the power companies, and how do they deal with the approximate 500 million per year shortfall...........what is the plan, or will they dispute the TRUTH of this analysis. Truth , Brother Bruno, ......truth, a precious commodity. Often only Time will Tell the Truth. Journalism is described as the first draft of history. Someday, historians will look back and debate and state who told the truth. Likely more truth here than from the statements of Nalcor and our politicians. Seek the truth.........part of the UG mission, I expect.PF

I am more or less with you on not believing in eternal damnation, as even Jesus also said that the dead knoweth nothing. And the concept of Hell as eternal damnation of the body may be a creation of others. Given that, does it leave room for such a thing as a soul, a spiritual part that may survive and enter the universe.....such that maybe one such as John Lennon, who promoted peace during the Vietnam war, may be connected to you via Karma.......just wondering. But Jesus does teach that those who do good will suffer on this earth........and you have felt the sting from your stand on MF.......I believe. And Maurice, from Smithy for 5 years.........goes to show the doctrines of Jesus are not without merit. And MF fiasco show a lack of moral concern by those who planned and executed the deed. So perhaps Smithy needs to be exposed, not in the afterlife, but this life. A paid troll you say. A troll yes. Paid.....I wonder.......maybe so, as he posts like at 6am, always on MF, but does not find fault with Ashley but condemns Russell, Pam and Jones for their mild pieces. But he is also silent when Russell speaks about Conservation.......as he seems to know he cannot refute it, and prefers to let that lie. Solar panels he calls getting energy from rainbows.......he needs to talk to Musk, that Tesla guy. Smithy...... a skilled manipulator. Would even prayer work against him......maybe not. Instant Karma........need to research that....heard of Instant milk, instant communication.......maybe something like that ......... Karma was not taught in my school, but I am open minded to learn. Keep up the good work. PF

PENG2If so far along and about 10 billion spent of 12.7 estimated, you project about 15 billion, if not more.........so a lot more debt, and if insufficient energy sold to pay for itself and operating cost and maintenance..........seems crazy to continue Transmission, ac and dc average over 90 percent, which seems to late to stop, and when operated over a few years will allow time to prove reliability or not. So the generation is where most is unfinished, and where all the life safety issues remain. Issues that may see a loss of that asset, and possible mass loss of life. Easy to lump all together .....but there are different risks.PF

Fair enough, but the #1 question no one has responded to that I have posed in my instance that construction needs to be completed is abandoning construction would mean default. Also, the $10B spent is actual cost out plus committed---$10B is approximately 80% of the $12.7B Nalcor has said the final cost will be.

What is the financial effect of default? Easy to finish construction and not operate, if completed, there is nothing directing the backwater level be raised to operation levels except egos. If completed and not operated, there are options to minimize outlet effects such that the river is effectively unchanged and site is mothballed, but we don’t default with this choice.

I have always said either finish construction or abandon the cost will be shy of $15B---what no one has done is quantify the cost (both direct cost and indirect) of a default.

My analysis of a default vs completion scenario shows a definite advantage for completion; I wont and have never forayed into operation.

What needs to be well understood is that is that there are currently only 2 options to analyze(granted this decision can be needlessly complicated with emotional views and wild budget creeps etc):1) finish on budget of $12.7B2) terminate/default and owe only the committed $10B plus any default penalties

Interesting..........and perhaps not so directly indicated before, or I overlooked your viewpoint. I agree that completing may be essentially the same cost as now termination with default penalties.........maybe If default, I assume cost would be less than 12.7 billion, as contractors walk without work finished, so some negoticated saving I assume. Lets say terminated in 30 days, and costs as is, is 11 billion. Then add penalties .......only to Emera I assume, who has investments about 2 billion. So total now 13 billion. If we complete and and not operate, cost may be 15 billion as the more likely figure, so 2 billion saving ( about what was used to justify sanction), so may be the least cost. And can we complete and not operate without penalties........on what grounds : that it is not proven safe, that it may flood downstream, that it comtaminates the water downstream, that we have to water management agreement, or all of the above. This seems a legal area beyond my knowledge to say it is just egos that would cause operation. Perhaps you have inside knowledge and legal opinions. Seems a bit like a Newfie Joke ; spend 15 billion for a project not intended to operate. Perhaps it is reasonable , as the economics to operate is void.I assume transmission would operate with a few hundred MW. Your view makes some sense.........but i would like to see what others think........ sounds crazy, but maybe not. And would this solution be preferred back when Ball came to power, and we were far less committed in cost.........but that is hindsight, if we assess from todays situation.PF

The short is this, Muskrat was the most cleverly devised scam of all time, with no need or basic, to spread over $12 Billion amongst the chosen. The chosen do not give a rats ass if this ever works. Why would they, when you will have more money than they will ever be able to spend. Further, this project reeks of corruption at the highest levels in our province simply by people not saying anything or deliberately looking the other way. We do not even have the ability to investigate this anymore in our province or does anyone have the balls to do it. Why would you unless you wanted to waste millions going up against billions. A simple key question that can be easily answered is, who got all the money (names) and who owns the employment agencies that are skimming funds!!!!

Interesting.......PF questions the misrepresentation by John Smith on Telegram comments to letter (see above) and suggests the Telegram fact check. Smith`s comments no longer appear after the Letter of Maurice Adams. Have they removed it as being intentional misrepresentation by Smith.......but Smith has done that for 5 years. Can anyone explain this. Is the Telegram like Facebook, a conduit for false information to affect public opinion. An Inquiry question , maybe.Winston Adams

Anony @ 14:24:Easy to find the recruiting companies and their owners---all the MF eligible recruiters are listed on the Nalcor website, a simple CADO search or in Ontario etc will yield all the owners/directors.

Also, make sure to check the Nalcor ATIPPA releases---an owner of a particular recruiting company has an interesting connection to the project. And if you still have a stomach, you can do a mathematical analysis to see which recruiting companies get the highest rates for particular positions---the info to do all this is on Nalcors website, easily available.

PF @ 13:02:Either missed or not read closely---I have posted the ~7 reasons why MF cannot be stopped several times here, however you have missed my point so I will recap:1) default on federal loan guarantee2) power guarantee to EMERA3) cash positive contractors4) work status5) construction contract cancellation costs6) site mothballing/remediation costs once contractors leave site7) misc close out costs

In the end, it would not the Newfie joke to spend $15B on something to not operate; it would be for opting to spend $12-14B on something the feds/EMERA would take over via default and we payback the sunk costs. Right now, at the end of the day we are paying $2-3B for MF, the other $10-12B is already spent/guaranteed to be spent.

PENG2I get your point, that we are so far in, that it may make little sense not to complete, as we still own the asset rather than the Feds and Emera. And if not operated, you suggest we are off the hook legally........not sure about that as to power contracts with Emera from our island power ( I assume that is conditional only if MF is operational.......so no liability there you suggest. That close to 15 billion is spent, and must be paid back, but to be non operational sounds like a joke........unless Others deals may be made later to make it operational, if made safe and can give some positive return on the 15 billion, whether with HQ or other opportunity, or Fortis....... I do not discount that completion may make sense, and no operation pending opportunities......in the USA a major hydro facility was built on the Columbia River, in the 1930s, that most said was a unnecessary waste and useless........until Japan attacked Pearl Hr, and that power was then very valuable on the west coast. A bit of a Hail Mary, but you infer operation or non operation is outside your range of suggestions......as this is beyond what is necessary now........completion. Not what I call a Strong finish........but a finish. Somewhere along this path I expect the need for external financial help to keep the island solvent. Would you expect the asset to be sold off cheap......rather than lost by default. If so, how cheap........maybe 1 billion, or you would not speculate.PF

OMG...what can the average joe say about this...."who cares", the government is good for it, if we need a few more million, or is it billion, ah what's the difference. We got the gull island coming, right, sell it to the Americans on the spot market, she's gona be booming by, and we got the oil. No, I am not snook, he is running. The problem is no one is bothering to inform themselves, rather dig their head in the sand, except a few of UG followers and a couple of other blogs. I have also talked to a few, what I call business people in the know, and ask what they think of muskrat, bans seems they shuffle it off to, not really in tune or following muskrat. How about the st. Joh's bot with their debt clock, have they all gone asleep while watching that clock. We need another click, ticking off some if those numbers by PlanetNL, would that get any attention, including, our MHAs , community leaders, etc. Can't mention the brave media, they are in la la land and looking for the next great show to follow the ace, or the mice and rats. Yup, the happy province is going to finincial hell in a hand basket, enjoy the ride bys. Thank got for UG and friends.

Silence is complicity. Where is Liberal party organiser and the province's Consumer Advocate Dennis Browne? According to an article published in The Telegram, Dwight Ball stated the Consumer Advocate advised him against a public inquiry. Bad advice coupled with a Premier who is lost in the woods is precisely what we do not need. Taxpayers and ratepayers will be broken by this catastrophic poor judgement.

Thank you for putting hard numbers on what an overview of costs vs income for MF will mean. It is plain to any inquiring mind that producing at 60 or more and selling for 17 or 7 or 5 to NS is a financial disaster. This clearly spells out the issue and it is not a pretty picture.

This information needs to be widely distributed. Perhaps David Vardy can present these realistic (probably conservative) figures to a radio audience on VOCM. It is also an opportunity for the CBC to finally inform residents about the MF risks. Has the CBC been pitched to do a phone in with David or another person that can convey the risk that MF poses to the next 3 generations?

Bruno, this sobering piece needs to be in the Telegram, but1. Policy dictates that pieces be not more than 1000 words,2. This piece shows clearly that the generation plant at MF should be immediately terminated........and Pam says that with 80 percent of the project complete.......the show must go on.3. I suppose, for revenue, the Telegram would have no choice but publish this if put in as an advertisement.4. Russell has never called for a stop to MF, so can these numbers influence him...........doubtful, as he would need permission of the owner to say he supports this piece of analysis5. Ashley.......will she analysis this and comment.......LOL.......as she only writes fluff for the power companies, no analysis and will not win any awards for investigative journalism. 6. This should send shock waves through Nfld and Labrador.....but expect mostly silence.......it has been forever thus.7. When did rational thought supersede hiding one`s head in the sand........to easy to hope and pray for a miracle that this analysis is wrong........so wrong it is not worthy of public discussion in the main media.8. The alternative is to wait for the bills to arrive, and other government services to be curtailed..........so kick the can down the road..........as preferred by PENG2, Ball, Stan Marshall, Dennis Browne, troll John Smith, and especially the Board of Trade tribe and Danny WilliamsPF

Another dark side to all of this is for new/young home buyers. My generation is reaching the age where we want to start to settle down and buy a home of our own. But if electricity prices are set to double/triple, what will that do to NL's already over-inflated home prices (thanks boomers!)? Between a shrinking economy, and aging demographic, home prices will bottom out - which will have a drastic effect on the well-being of people who have bought homes in the last few years, or are hoping to enter the market within the next few years. The boomers and GenXers in this province have certainly outdone themselves in ruining the future for the generations that follow.

Right on DT, don't blame you a bit for being pissed at us. You have every right to be. It's really a call to arms, the first I have heard from your generation, but you are the ones that will suffer the consequences if you remain. Of course not all of the boomers and genXers are to blame, some have been hollering about this before scantion, but it was really the generation you mentioned that put the nails in our coffins. We all know most of the movers and shakers of muskrat and NALCOR, and some are still making a mint on your generation. Do they have any shame, nope just want to fill their pockets, and the hell with the rest including their children and grandchildren. Your generation DT take a stand and maybe the boomers etc... Will follow you,,, some with their heads held in shame.

I don't want to sound harsh about it, but if we continue on our current course, there will simply be nothing here for my generation - and those left will be seniors living without the help of young people, something that becomes quite difficult the older you get (especially with the terrible lifestyles NLers lead, I'm surprised anyone here makes it past 60). But I have a real concern that many boomers who now own their home will simply not accept that their 20G-40G investment in the 60s/70s/80s (if that) is unfortunately not worth the 400G - 700G they were expecting to get when they downsize/pass along to their kids. And even worse, the people who bought homes within the last ten years for a ridiculous price will be stuck upside down on massive mortgages (can you believe some people were silly enough to pay 700/800G or more to live in ST. JOHNS of all cities? they certainly drank the Kool-Aid!) If I can only afford a 1300 to 1600 dollar mortgage, how the heck can I pay a 1000 dollar hydro bill? This MF Madness will slowly seep into other sectors with unforeseen consequences for the young and old. Mr. Ball just learned that the hard way, no-one around to buy his condos for 250G - 350G! So what should I do? wait until it the housing market tanks, and move in to pick the meat from the bones? I'm not some lazy bum, I work full time and have never collected unemployment, I pay my bills on time and am saving for my future, but the question now, is where does that future lay? I love this place, I'm a born and bred Nler, and if you had to ask me when I was a year or two out of highschool, if I would ever consider leaving this place, I would have laughed in your face, now it seems like a real, and frankly, heartbreaking reality.

Also, to add to this, I took the advice of the previous post, which provided the Premiers contact info, and sent him an email explaining my predicament, asking for his advice. If I get a reply, I will post both the email I sent, and his response.

The short is this, Muskrat was the most cleverly devised scam of all time, with no need or basic justificaiton, to spread over $12 Billion amongst the chosen. The chosen do not give a rats ass if this ever works. Why would they, when you will have more money than they will ever be able to spend. Further, this project reeks of corruption at the highest levels in our province simply by people not saying anything or deliberately looking the other way. We do not even have the ability to investigate this anymore in our province or does anyone have the balls to do it. Why would you unless you wanted to waste millions going up against billions. A simple key question that can be easily answered is, who got all the money (names) and who owns the employment agencies that are skimming funds!!!!

Let me try this one last time - these calculations make no sense in finance. Suppose the final tally for MF is $15B and it becomes a completely stranded asset. The present value of $15B in debt is .... drum roll .... $15B. Now if you assume that each future interest payment is financed through borrowing and you apply interest to those future payments, one can generate a rather impressive tally of future payments. However, the present value of those future payments is ... drum roll .... still $15B.

Obviously an increase in the net debt of NL of $15B represents a massive burden. It involves a doubling of total net debt to something close to 100% of GDP, which is unprecedented. However, as long as interest rates remain low, the cost of servicing that debt will remain well below levels experienced in NL during the 1990’s when interest rates were about 3-4 times higher than they are now.

I have no quarrel with the author’s conclusions: NL was facing a major crisis even before the extent of the problems at MF became clear. Net debt as a percentage of GDP had already doubled over the last few years. The plan to eliminate the budget deficit is based on the forlorn hope that oil prices will recover dramatically. Public sector spending is barely touched even though spending per capita is among the highest of all Canadian Provinces. The burden of public sector pensions in NL is, in my humble opinion, grossly underestimated. MF debt represents a major additional burden which will require a sharp reduction in Government spending and services. Moreover, NL will become extremely vulnerable to any increase in in interest rates, whether because of rising rates in Canada or because of higher credit spreads for NL. This exposure represents a menace to the sovereignty of the Province. However, it makes no sense to tally the value of future payments for the simple reason that the value of a dollar today is not equivalent to a dollar in the future. The sum total of the future payments has no obvious financial interpretation.

From Bernard's submission..."However, it makes no sense to tally the value of future payments for the simple reason that the value of a dollar today is not equivalent to a dollar in the future. The sum total of the future payments has no obvious financial interpretation."

So you're implying then... that the present-day efforts that giant energy corporations such as Exxon Mobil and BP put into their long-term investment strategies are all for nought?

People on this blog tend not to insult one another - this isn’t Youtube. You also should perhaps try to understand what I wrote before commenting. I didnt say that it makes no sense to estimate future payments - I simply wrote that you can’t sum up a dollar today and a dollar tomorrow without discounting the payments by an interest rate. I don’t remember mentioning Mobil or BP but I betcha they discount future streams of income so as to compare projects based on their present value.

Mr. Lahey, I still don't quite follow you when you say "it makes no sense to tally the value of future payments for the simple reason that the value of a dollar today is not equivalent to a dollar in the future. The sum total of the future payments has no obvious financial interpretation."

Yet there are many web-based calculators that allows one to determine what a sum of money will be worth at some point in the future based on a constant inflation rate, for example...

https://www.adirondackbank.com/mobile/calculators/csFutureDollar.asp

Using this calculator, at a constant 2% interest rate, $1M in today's dollars will be worth about $370K after 50 years. What am I missing here, could you please clarify, thanks.

Robert, I never took any "Engineering Economy" courses to "pay attention" to ... I pursued degrees in physics and maths, and post-grad studies in applied fluid dynamics. So if you're trying to make me feel stupid because I didn't pursue a particular field of academics, it's not working... in fact, you're only succeeding at coming across as condescendingly smug, which is.. suffice to say.. a rather unpleasant personality trait.

And you still haven't answered the question, so your communication skills re: knowledge transfer could use much improvement as well.

My apologies Mr Garvick, I only saw this now. The calculator you are referring to is actually an inflation calculator not an interest rate calculator - so 20 years from now $1M today will only buy today’s equivalent of 670k (using your calculator I don’t get the same answer as you do) of stuff in 20 years. Interest calculations go the other way. http://keisan.casio.com/exec/system/1232679460

If I invest $1M today at 5% it will be worth $2.6M in 20 years. If you want the “real” or inflation-adjusted future value assuming 2% inflation as in your calculation, you multiply the $2.6M times .670. So my point is that you shouldn’t add $1M today and $1M in 20 years because they are not equivalent. And, $1M today + $1M in 20 years is not equal to $2M in 50 years - these figures cannot be compared in any meaningful way. Therefore, the future streams have to be discounted by the interest rate in order for the amounts to be understood.

My point really is that the burden of MF is actually pretty easy to calculate although you have to make some very bold assumptions.I was trying to see what the worst case looks like - so I assume it is a stranded asset financed with $15B in debt but that generates no revenue (this is only to simplify what the worst case looks like - it is not my forecast - I am not competent to judge what the final situation will be) . That represents a doubling of NL’s net debt to about 100% of GDP. However, since interest rates are so low, say 3%, the annual burden on the NL budget would be about $450M or about 1.5% of GDP - in addition to current debt service of, say, 5% of GDP. That is a big burden but less than the debt service burden borne in the 90’s when interest rates were so high. My point was that even the worst case is bearable UNLESS interest rates rise. Now, let me repeat - interest rates are a big IF - also, I find the current deficit reduction scheme is not credible to begin with. Finally, I think the burden of public sector pensions in NL is underestimated because they assume a very high rate of return on the pension funds.

Therefore, NL may have trouble financing such large deficits. That is why I agree that in the worst case scenario, public services will have to be cut, perhaps dramatically. In any event, I think that is a more reasonable, clear and intuitive way of looking at the subject.

1) I am aware it's an inflation rate calculator... my reference to "2% interest rate" in the last sentence of post 20:06 was a typo, I meant to state "2% INFLATION rate", apologies for any confusion.2) When you load the inflation calculator webpage, the inflation rate text-field is defaulted to 3%. If you change that to a 2% inflation rate over 50 years, you'll come up with the same number I did, $371K. I used 2% in that example so as to maintain consistency with the assumed inflation rate used in PlanetNL's submission. So in terms of buying power the ratio is thus... a dollar in 2017 would be equivalent to 37 cents in 2067, assuming a constant 2% inflation rate.

So yes, I think I understand now what you're getting at... from your most recent example, the $2.6M accrued from investment over 20 years would actually have the equivalent buying power of $1.7M in 2017 dollars due to inflation.

But with regards to that, does this mean that PlanetNL's analysis is fundamentally flawed? If so, is there some way to take these factors into account so as to salvage PlanetNL's analysis?

I also understand the perhaps more ominous point you make about the disastrous impact a spike in interest rates would have. NL's current fiscal state is a house of cards... a false economy precariously built on a horrendously bloated public sector and fiscally crippled by government-funded boondoggles, at a dangerously high risk of insolvency should interests begin rising.

And Robert, no worries, apology accepted... I too may have over-reacted a tad. No doubt we're all on edge and more than a little PO'ed that NL politicians have proven... yet again... that their ability to provide competent, accountable governance is hopelessly beyond their capabilities, and it's the taxpayers who'll be stuck holding the bag while these oily culprits and their cronies get off scot-free and retire to their Florida condos... I'm poisoned with it... absolutely infuriated by the thought of it.

I think the analysis is fine and I actually agree with the conclusions. I just think that the seriousness of the situation is exaggerated. I also think there is a simpler way of analyzing the situation (my way lol).

I wouldn't say the fiscal situation of NL is a house of cards. The challenges are daunting for sure, but NL has faced difficult situations before. This time however, the risks are high for sure. An economy leveraged to commodities, high debt, aging population, slowing economy - potential for out-migration - need I go on?

Thanks to Danny Williams and his merry band of deplorable PC tories bank robbers Quebec now has what it was looking for since the 1920's. Control of Labrador with all its hydro and mineral resources with the island in complete isolation financially.

What I find pathetic is the CBC reported in the news a total of five times about the Land Resources move to the city of Corner Brook with a total of 30 jobs relocated along with the move and John Kennedy ( a retired Land Resources worker) complaining about the said move. Just imagine a total of 30 jobs out of a civil service of some 30 000 located here in St. John's relocated to the second city and this guy complains but he was probably privy to the information about the crown land a certain former premier amassed while he was premier. John Kennedy where was your inside voice then when a politician was doing something illegal within your department? Oh I forgot. You said nothing because it didn't affect you.

Such is the civil service in NL. They speak up when it directly affects them but never when it is of provincial importance such as Muskrat Falls or a politician stealing crown land.

From Bernard: "The present value of $15B in debt is .... drum roll .... $15B. (...) The future interest payment is financed through borrowing and you apply interest to those future payments (...) The present value of those future payments is ... drum roll .... still $15B. "

It's so well explained. I just don't get why people are still questioning this.

Upon conducting a quick google search it is quite apparent that Mr. Lahey's credentials to speak to these issues are impeccable. The UG forum is very fortunate indeed that Mr. Lahey would care enough to take the time to share his wisdom with the readers of this forum...

Seems Lahey agrees with PlanetNL conclusions, and whether 15 billion debt or much higher long term as presented ........we are headed down to Hotel California as Robert suggests.....a prisoner of our own devices. This piece says there is overwhelming evidence of energy demand compression .....to make MF unnecessary. This was my expectation in 2012, based on the stated need to address our electric heat load problem, and the technology that then long existed to give equivalent heat for one third the amount of electricity used.....like giving us access to low cost natural gas, but still using our existing island isolated hydro power grid.

For this reason I proceeded to monitor such technology performance for our climate, which the power companies refused, and still refuse to do. That I heat a 1000 sq ft house for less than 300.00 a year, keeping careful check and record of the energy used ....... so to change assumptions of energy saved to evidence based data. Many utilities do end-use research..........but not here.......as it allows them plausable deniability, as PENG2 would say........similar to the failure to measure ice thickness near Mud Lake this past winter. Where is the line between incompetence and wilful deceit.

Energy demand compression is heading for a perfect storm, from several angles. All reasonably foreseen, unless wilfully blind.Winston Adams

Winston:Here are some questions that will need to be addressed soon:If power rates climb will the oil refinery at Come by Chance close? It is already on a slippery slope with the financial viability of its operation and the looming trade problems with the US government. The same question could be asked of the Vale Nickel processing operation at Long Harbour. Remember that that operation is being run by a Brazilian company noted for its anti-labor and aggressive management style. This could be the excuse Vale is looking for to ship raw ore out of Labrador and to third world processing facilities.

How much is the power bill of the provincial government and municipal governments going to increase with resultant increases in namely municipal taxes?

Will the Corner Brook paper mill be closed if they are forced to pay more for power? This will leave another 120 MW of power available from Deer Lake from that will be competing against Muskrat Falls and will Kruger try to obtain more in subsidies for its operation as a result of this mess?

How Many medium and small businesses will be affected? Operations such as fish plants may well close with their entire operations moved to other countries if their power bill increases excessively. This will also include the hundreds of warehouses around NL which need electricity to heat and regulate temperature as well as for their day to day operations?

Will this create a mass outward migration of young people to other areas of the country as both their taxes and power bills increase and the career and job opportunities dry up? I believe this has already started and will only increase to a point where those left behind such as retirees will have to follow.

Are you suggesting that NALCOR people are from another planet, and you would not want them to be handling your financial affairs, as they might double or triple the cost they quoted and extended the time to complete by years. If so, that is exactly who is handling your affairs, NALCOR whether you like it or not, and will put your entire life and the entire province in financial ruin....please agree or disagree, or enlighten.

As to the wide scope of if the refinery, Corner Bk mill , fish plants will close and extra power costs for govn buildings , and exodus of residents........these are far reaching questions that no one can answer with certainity, but cost of power is a fundamental issue......... This goes to back to why this was not treated serious before sanction. For residential change to efficient heating, this is a decade long process, that reduces power use incrementaly each year, so fits with PlanetNL suggestion of a crisis in about 10 years, but should be addressed now to avoid a crisis. I do not consider this piece as fearmongering, but a reasonable expectation unless solutions are assessed and found.So far there is only silence, and silence is complicity, I suggest.Winston Adams

The lack of a coherent renewable energy strategy, after the OPEC energy crisis of the 70's, for NL's important industries, is a legacy we must overcome, if our grandchildren will have a future. The Tories ripped the National Energy Plan. The Tory-minded Liberals dropped out. The Provincials lacked the will. Maybe the resulting anger over "Danny's Legacy project" will move the progressives to action.

An interesting article in The Telegram by Russell Wangersky. It appears as a result of open access transmission tariff (OATT) regulations Newfoundland may be obligated to allow power to be sold back to us from alternate suppliers on the interconnected North American grid. In this case Hydro Quebec or other mainland utility can sell Newfoundland Power their power rather than them purchasing it from NL Hydro. These outside utilities could sell power to Newfoundland Power at much cheaper rates than Muskrat Falls power will cost.

This might lead to a benefit to consumers who would not be subject to the large rate increases associated with Muskrat Falls power (though I suspect the outside utilities would keep their pricing just enough lower than Muskrat Falls power to maximise their sales and profits). As Newfoundland Power is required to sell electricity to its consumers at the lowest rate possible (through PUB regulation) they can easily justify purchasing it off the interconnected grid rather than NL Hydro. The power purchasing agreement only requires NL Hydro buy Muskrat Falls power and not Newfoundland Power. If this were to occur there would be zero market for Muskrat Falls power on the island and therefore zero revenue. Power that was generated would have to be sold to Emera to get any revenue for it and Emera then could turn around and sell it back to us at a big profit though still lower cost than it would be through NL Hydro.

With next to no revenue being generated this would put even larger financial pressure on government to fund the capital and operational costs of Muskrat Falls.

And up go our taxes--MF has to be paid for one way or another.One thing I'm afraid of is we're gonna lose the UC to Quebec Hydro and the Lab/Quebec border will be altered in exchange for Quebec Hydro assuming the MF debt. Either way, because of Danny's ego NL is screwed. One bright thought is perhaps DW will go to Quebec "cap in hand" asking them to buy plots in Galway--now wouldn't that be something!

Bruno, do you think that my calling out the Telegram to fact check,and my data countering and exposing Smith as two faced, ( him using Jesus phrase.....the truth shall set you free) influenced the Telegram to terminate comments........timing is odd! And the Telegram let him go with his BS for years. Their prior restriction on comments reduced comments 90 percent, but Smith always got through with his propaganda.PF

There is no doubt that they must be feeling sensitive that the forum has become cover for trolls like "Smith". Muskrat is so divisive, and the Telegram has been unwilling to do what this blog does--investigate and inform--that ending the forum relieves them of the justifiable "fake news" moniker. Good work.

Have you thought about pitching CBC radio to do a phone in with David Vardy or with UG himself? They may be too modest to do it themselves. This out of control project threatens the fiscal viability of NL and needs investigation and an audit now. Stress the urgency and do it more than once.

Folks have mentioned pitching the Fifth Estate and W5. The more that do it the more likely a producer will pay attention. This blog is a researchers dream. The elements of the story and the fraud researched and documented.

I am certainly a fan of Vardy and UG. I have occasionally thought of a call into CBC or VOCM .......but didn`t. I am more or less a technobabble guy, which jouranlists are not, which allowed Nalcor to BS the media. MF is a technical nightmare, and Smith for 5 years combined a few facts with mostly fake news to keep the uninformed ignorant of the pending doom of the project. I have thought of a debate or presentation at the Harris Centre....with Vardy, Sullivan , and someone esle with technical expertise vs Nalcor . But Nalcor has admitted the boondoggle........but the govn and power companies continues with deceit. So .......is Smithy finally dead! 5 years the Telegram gave him free reign, and never once fact checked anything he said and they let him repeat his BS weekly. His favourite words for the MF naysayers were that they comprised the LUNATIC fringe. Power at 60 cents per kwh cost ..........who was the lunatic!PF

Mr. Anon at 15:25,Is there any reason to think that Emera can sell their chunk of MF energy bought at $.05/KWh to Newfie Power for, say, $0.10/KWh and then make up their energy deficiencies on the spot market? Emera could make a fortune, NLP could make a fortune in a $0.17/KWh retail environment.Hydro would be left slack-jawed, dazed and drooling, stunned as the stones. RGBud

My God it is worse than one can imagin. I hope this so called enquiry may shed some light on those responsible and how in this age Public was sold out. Nalcor, we can not afford and must go, knowing full well that we will end up paying one one or other, but we will have satisfaction that the beast dead.Madan Rana

I have done a story with Nififoruk, read his book on Weibo Ludwig, and followed his Site C exposes. He is a good journalist, unafraid to go wherever the story leads him. I hope he and Vardy hit it off this weekend with the striking similarities between Site C and MF.

For those interested in low cost efficient heating, and my monitoring of performance for the Avalon:Recent data, reported here, showed about 95.00 cost for heat and AC for 6 month period from Apr 1 to sept 30. If one looks at the warmest 6 months, it appears it would be June 1 to Oct 30. Apr and May is rather cold in Nfld, whereas Sept and Oct is usually pretty good. Oct is only half way through, but projecting from May 1 to Oct 30, the electricity use drops from 95.00 to about 78.00, and possible May 15 to Nov 15 may be the lowest for this year. June has the sun highest in the sky, but ground temperature lags behind several months, was at a max Sept 2, so warmer ground reduced the heating load for Sept and Oct more than one might expect, than going by the sun in the sky. Ground temperature low point, about 43 F occurs not in Jan, Feb or Mar , but April.........so leads to heating bills relatively high for April and May. This heat timing should jive with Holyrood oil burning ramping up form Oct 15 onward. Afterall, growing domestic heat load was he rationale for Muskrat, and Nalcor could see no better way than unreliable power at 60 cents per kwh. That was `world class` Nalcor! World class tribe out to screw the middle class for 50 years.Winston Adams

Robert, I am not really competent to comment on the article. I am sure you know as much on the subject as I do. I was involved in finance and had nothing to do with the core business. I will say that historically, most jurisdictions (like Ontario) have a very strong preference for electricity generated within their boundaries. Most jurisdictions are loathe to depend on others for such a critical input. That is especially true in the case of electricity generated thousands of kilometres away. In addition, there is large and growing opposition to unsightly electricity transmission towers which makes delivery of that electricity quite a challenge.

Thanks Bernard. I'm assuming also that the age of cheap and sustaining hydro from QU/NL, exported economically to New England is reaching it's peak. Just a few rivers remain to be economically harnessed, but the reliable transmission right of way to the South will remain through QU. Not enough understanding of the importance of grid and smart grid technology. Proximity of distributed generation to this reliable grid; thermal, wind, co-gen, solar, etc. is and will be the main focus of power engineering for the next 50years and beyond. NL and QU need to put the past acrimony aside and join forces over the remaining opportunities.

Is it time for for an ethics chat.......after all, good governance implies that those that govern are good people, or relatively good. Will it be Karma that Costco will not open by Xmas at Galway, or few house starts there yet........or the cause of the boondoggle..... Karma is a term , a spiritual principle, about the cycle of cause and effect..... that is, what happens to a person happens because they caused it with their own actions. Karma is an action, but also an intent.A good action creates a good karma, as does good intent. A bad action or bad intend cause bad karma. This concept originated in India, and is a bit difficult to define, but a part of several major religions. Some believe that karma extends to the past, present and future lives, and operates independent of a deity or process of divine judgement. It is a concept, and a common theme is its principle of causality.

A 7th century BCE verse says:

Now as a man is like this or like thatAccording as he acts, and according as he behaves, so will he beA man of good acts will become good, a man of bad acts , badHe becomes pure by pure deeds, bad by bad deedsAnd here they say that a person consists of desiresAnd as he desires, so is his willAnd as is his desires, so is his deedAnd whatever deeds he does, that he will reap.

Most in Nfld were not educated in the concept of karma. But I recall John Lennon and the Beatles travelling to India, for enlightenment. And Lennon, promoting peace, while later being on the FBI watch list. And there is a blank on the history of Jesus from age 12 to 30, and some speculate he travelled to India. And St Thomas is said to have set up teaching Christianity in India. And Ghandi, adopted Christian principles of peaceful protest, like our Land protectors from Labrador) to help rid India of the British Empire. So seems to have gone full circle. But some Karma mottos: No need for revenge.....just sit back and wait.......those who hurt you will eventually screw up themselves, and if you`re lucky, God will let you watch. ( Must mean the Inquiry will be televised, or online)

One`s karma effects one`s happiness, the effect may not be immediate , but later, and even to future lives.

The karma principle can be understood as a principle of physhology and habit. Karma seeds habits, and habits creates the nature of man. The idea of karma may be associated with the notion of a person`s character. Karma is a natural law that produces consequences.

Forgive the person and their actions, never give in to hate,set it free, and Karma will take care of what is meant to be.

While karma is not taught as part of Christianity, yet the verse 700 years before Christ (and whatever deed he does, that he will reap) is almost identical to ` What one sows one will reap`

So there you have it...........Karma....my research having been prompted by Bruno......

I have been advised that the inquiry setup does not require Legislative debate, and further, is imminent. There must be some political demand to have this set up and over with before the next election. Those who want to provide public input to the inquiry best have their ducks in a row.

Grid peak loadOct 7....816MWOct 8....800Oct 9....860Oct 10...789WIth about 1100 Mw of island Hydro, if all working, it seems little need for Holyrood yet........good for low emissions and lower costs for fuel. MF.......15 billion to replace Holyrood and find we still need Holyrood for backup, unless Liberty is wrong,..... and MF might be reliable .......what is the oddsWinston

OBVIOUSLY #ShutMuskratDown before "Forensic Audit" and "Public Inquiry" otherwise both processes are open to accusations of being INEQUITABLE. In other words #ShutMuskratDown PENDING THE OUTCOMES. The existing structures at Muskrat Falls represent a commonly agreed Boondoggle. They should become a monument not a dam built in the wrong place. Surely common sense must now prevail?

About Des Sullivan

Uncle Gnarley is written by Des Sullivan, of St. John's.
He is a businessman engaged in real estate, retail and development companies.
A Director of Sullivan Capital Corporation, he is a former Executive Assistant to Premier's Frank D. Moores (1975-1979)and Brian Peckford (1979-1985).
He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB).
Uncle Gnarley permitted the use of his highly regarded name provided he could have full access to state his own rather unequivocable opinions. (A more detailed Profile of Uncle Gnarley is described in the very first Post entitled "Uncle Gnarley is alive and well" found on this site.
Sullivan is a firm advocate of sound fiscal management by the provincial government and intends to use this Site as a forum for commentary on the major issues of the day. Says Sullivan, "Newfoundland and Labrador inspires debate on a variety of issues, a veritable Muskrat Falls of opinion".
Readers are invited to leave their opinions, too.
Uncle Gnarley will post every Monday, and more often as events warrant.